Stock Symbol: AEM (NYSE and TSX) TORONTO, May 8
/PRNewswire-FirstCall/ -- Agnico-Eagle Mines Limited
("Agnico-Eagle" or the "Company") today reported quarterly net
income of $28.9 million, or $0.20 per share for the first quarter
of 2008. This result includes a non-cash foreign currency
translation gain of $8.9 million, or $0.06 per share. Additionally,
the non-cash stock option expense totaled $12.8 million, or $0.09
per share in the first quarter. In the first quarter of 2007, the
Company reported net income of $24.9 million, or $0.21 per share.
First quarter cash provided by operating activities decreased
slightly to $53.8 million from $56.1 million in the first quarter
of 2007, as sharply higher gold prices were offset by lower gold
production and increased exploration and tax expenditures. "Strong
financial results were achieved once again this quarter from our
LaRonde operation. With the new Goldex mine starting operations in
April and our new Kittila mine expected to open this September, we
expect to see improving cash flows over the next several quarters",
said Sean Boyd, Vice-Chairman and Chief Executive Officer. "In
addition, we remain excited about the potential to continue to
increase our gold reserves and resources in 2008 and the
possibilities this may bring for further production growth at our
existing projects", added Mr. Boyd. First quarter 2008 highlights
include: - Strong Operating Results - good metal output and cost
control contributed to solid operating earnings and strong cash
flow - Low Costs - Low total cash costs per ounce(1) at LaRonde of
minus $399 - Progress On Gold Production Growth - new Goldex gold
mine now commissioning. Kittila gold mine project on track for 2008
production - Significant Exploration Upside - continuing to receive
encouraging results outside of currently known reserve/resource
envelopes at Pinos Altos and Kittila The Company's financial
position remains strong with cash and cash equivalents of $294.4
million at March 31, 2008 and a substantially undrawn $300 million
five-year unsecured revolving credit facility. The Company's cash
position decreased $101.6 million in the first quarter largely due
to the $158.0 million invested in the Company's gold growth
projects during the quarter. Payable gold production(2) in the
first quarter of 2008 was 50,892 ounces at total cash costs per
ounce of minus $399. This compares with payable gold production of
58,588 ounces, at total cash costs per ounce of minus $332, in the
first quarter of 2007. The decrease in production was largely due
to lower gold grades mined as a result of the mining of currently
economic, but lower grade, parts of the orebody. For the full year,
gold production from LaRonde, Goldex and Kittila is still forecast
to total 358,000 ounces. Shareholders' Meeting Tomorrow The Company
will host its Annual and Special Meeting of Shareholders on Friday,
May 9, 2008 at 11:00 a.m. (E.D.T.) at the King Edward Hotel, 37
King St. E., in Toronto, Canada. Management will review the
Company's financial results for the first quarter 2008 and provide
an update of its exploration and development activities. Via
Webcast: A live audio webcast of the meeting will be available on
the Company's website homepage at http://www.agnico-eagle.com/. Via
Telephone: For those preferring to listen by telephone, please dial
416-644-3417 or Toll Free 1-800-732-9307. To ensure your
participation, please call approximately five minutes prior to the
scheduled start of the call. Replay archive: Please dial the
toll-free access number 1-877-289-8525, passcode 21259717 followed
by the number sign. The conference call will be replayed from
Friday, May 9, 2008 at 1:30 PM (E.D.T.) to Friday, May 16, 2008
11:59 PM (E.D.T.). The webcast along with presentation slides will
be archived for 180 days on the website. LaRonde Mine - Strong
Production and Cost Control Performance Continues The LaRonde mill
processed an average of 7,431 tonnes of ore per day in the first
quarter of 2008, compared with an average of 7,461 tonnes per day
in the first quarter of 2007. LaRonde has now been operating at an
average of more than 7,300 tonnes per day for more than four years,
continuing to demonstrate the reliability of this world class mine.
Minesite costs per tonne(3) were approximately C$65 in the first
quarter. These costs are slightly higher than the C$64 per tonne
experienced in the first quarter of 2007, largely due to the
general increase in costs in the industry. The forecast for
minesite costs per tonne at LaRonde continue to be C$66 for the
full year, again largely due to industry-wide cost pressures. On a
per ounce basis, net of byproduct credits, LaRonde's total cash
costs per ounce remained very low by industry standards, at minus
$399 in the first quarter. This compares with the results of the
first quarter of 2007 when total cash costs per ounce were minus
$332. The decrease in total cash costs is due to higher byproduct
revenues resulting from higher realized prices for silver and
copper and increased zinc production, offset slightly by lower zinc
prices. Cash Position Remains Strong, Despite Large Investments in
Gold Growth Cash and cash equivalents decreased to $294.4 million
at March 31, 2008 from the December 31, 2007 balance of $396.0
million. As expected, all of the Company's operating cash flow and
a portion of its existing cash balances were reinvested in its gold
growth projects. During the quarter, Agnico-Eagle added $53.8
million of cash provided by operating activities. Capital
expenditures in the quarter totaled $158.0 million, including $40.3
million on the construction of Meadowbank, $25.4 million on Goldex,
$38.1 million at Kittila, $9.4 million on the LaRonde Extension,
$22.4 million at Pinos Altos and $14.4 million at Lapa. The
Company's cash position is anticipated to decrease further in 2008
as the Company expects to spend more than $550 million on capital
expenditures related to its development projects, as previously
disclosed in Agnico-Eagle's press release of December 10, 2007.
This capital expenditure estimate was based upon foreign currency
exchange rates of $1.146 C$/US$ and 1.288 US$/Euro. At current
exchange rates, and considering industry-wide cost escalation, this
capital expenditure estimate is likely to increase. However, with
large cash balances, strong cash flows, no long term debt, and
substantially undrawn bank lines of $300 million, Agnico-Eagle is
fully funded for the development and exploration of its existing
pipeline of gold projects in Canada, Finland and Mexico. New Goldex
Mine Commissioning; Four More New Gold Mines Under Construction At
the 100% owned Goldex mine in northwestern Quebec, proven and
probable reserves are 1.6 million ounces of gold (23.1 million
tonnes grading 2.2 grams per tonne). Current reserves are estimated
to be sufficient for a nine year mine life with expected annual
production averaging 175,000 ounces. With a large additional
resource, the mine remains open for expansion. Please see the table
titled "Detailed Mineral Reserve and Resource Data - December 31,
2007" later in this press release for further detail. The initial
ore was fed into the Goldex mill in the third week of April and
commissioning is underway. The mill is currently operating at
approximately 4,400 tonnes per day and the initial gold pour was
performed on May 7, 2008. Commercial production (70% capacity for
30 consecutive days) is expected to be declared in mid-2008. The
full production rate of 6,900 tonnes per day is expected by
September 2008. Current production is sourced from the surface
stockpile of approximately 254,000 tonnes (grading 2.02 grams per
tonne). Construction commenced at the 100% owned Kittila mine
project in northern Finland in the second quarter of 2006. The
project is expected to produce an average of 150,000 ounces of gold
per year over its estimated mine life of 13 years. Kittila has
probable gold reserves of 3.0 million ounces (18.2 million tonnes
grading 5.1 grams per tonne). Most of the major components of the
semi-autogenous, or SAG, mill have been delivered to site and
mechanical installation has begun. The interior brick work on the
autoclave is nearing completion and piping has started. The plant
is on schedule for an August 2008 start up of the grinding and
flotation circuits, while the pressure oxidation circuit is
expected to begin operation this September. Overall, pit stripping,
infrastructure construction and equipment delivery at Kittila are
on schedule for the September 2008 mine start up. Drilling from
surface is ongoing to convert resources to reserves and to extend
the overall envelope. Currently four surface drills and one
underground drill are in operation. A fifth surface drill will be
added later this month. Three drills have been working on the
resource to reserve conversion program while two have been focusing
on the deep exploration program. Some results from the deep
exploration program have been previously released but these results
have not been included in the current reserves or resources (see
press releases on February 15, 2008 and May 9, 2007). It is
expected that the assays of more recent drill holes will be
received by mid-year 2008, when a further exploration and resource
update is planned. Considering the growth in reserves and resources
to date, the Company has begun to contemplate future increases to
the production rate and also methods to access the deeper
mineralization at Kittila. At the 100% owned Lapa mine project in
northwestern Quebec, the final phase of construction commenced in
the second quarter of 2006. Proven and probable gold reserves of
1.1 million ounces (3.8 million tonnes grading 8.9 grams per tonne)
are expected to support estimated annual production of 125,000
ounces per year over an anticipated mine life of seven years.
Lateral and vertical raise development is well underway with a
lateral advance of more than 1,600 metres completed by the end of
the first quarter. Construction of the surface service facilities
is proceeding well. Initial production from Lapa is expected to
begin in mid-2009. At the 100% owned LaRonde mine in northwestern
Quebec, construction commenced in the second quarter of 2006 on the
infrastructure extension at depth. Proven and probable reserves of
5.0 million ounces (34.9 million tonnes grading 4.4 grams per
tonne) are expected to support a mine life through 2021. Annual
gold production is anticipated to average 340,000 ounces over the
remaining 14 year mine life. During the first quarter, the winze
excavation reached the Level 215 station (2150 metres below
surface) where ground support and concrete work was completed at
the brow. The first bench in the shaft was blasted in March 2008.
The blasting of the waste silo collar and the installation of the
steel, including liners of the silo, were completed in March 2008.
The construction of the cooling facility and electrical substation
on Level 170 are ongoing. At the 100% owned Pinos Altos mine
project in northern Mexico, the property has probable gold reserves
of 2.5 million ounces (24.7 million tonnes grading 3.2 grams per
tonne). Additionally, the property contains a large silver reserve
of over 73.1 million ounces (from the same 24.7 million tonnes
grading 92.2 grams per tonne). The project was approved for
construction in August 2007. Average annual production is expected
to be approximately 190,000 ounces of gold over an estimated 12
year mine life with start-up expected in mid-2009. All the
necessary land agreements with the four local ejidos have been
established and in April 2008 the Company received official
recognition as a "socially responsible company" from the State of
Chihuahua for its community efforts. The construction of a 2,800
metre underground exploration ramp commenced in March 2007 and has
advanced approximately 1,200 metres. Additionally, the development
of the production decline has advanced approximately 450 metres and
site preparation for the start of surface construction is underway.
The first pieces of the surface mining fleet have been delivered
and pre-production stripping of the Santo Nino pit has commenced.
Surface and underground drilling on the main Pinos Altos property
also continued during the first quarter with early results
continuing to support the effort to convert resources to reserves
and to extend the known mineralized boundaries, particularly at
Cerro Colorado. Exploration drilling also continues on the
Creston/Mascota area. This region, approximately 10 kilometres
northwest of Santo Nino, currently has an inferred gold resource of
7.7 million tonnes grading 1.4 grams per tonne gold and 16.2 grams
per tonne silver. The resource could possibly be processed via heap
leach although a milling option is also being contemplated. An
initial scoping study, on what could be a stand-alone mining
operation, is expected to be completed by the end of 2008.
Negotiations for additional surface rights with the underlying
royalty holder are ongoing. If these negotiations are not
successful, modifications to the proposed mining sequence in the
base case feasibility study may be implemented and the construction
schedule may be delayed as a result. Agnico-Eagle's 100% owned
Meadowbank project in Nunavut has probable gold reserves of 3.5
million ounces (29.3 million tonnes grading 3.7 grams per tonne).
With a large additional gold resource, the project remains open for
expansion. Initial gold production is anticipated by January 2010.
Annual gold production is currently estimated to average 360,000
ounces over the estimated nine year life of the mine. The
all-weather road from the deep-water port at Baker Lake to the
Meadowbank project site was substantially completed in the first
quarter of 2008. Construction of the permanent camp facilities is
underway with approximately 64 beds available at the end of the
first quarter 2008. Detailed engineering, sourcing and acquisition
of the major capital equipment are ongoing. The first pieces of the
major capital equipment have already been delivered to the site.
Surface diamond drilling has resumed with four rigs in operation.
The immediate focus is to confirm the gold mineralization between
the Goose Island and Portage Zones. Additionally, targets include
resource conversion at Goose Island and Goose South. Total
exploration drilling in 2008 is expected to total approximately
25,000 metres. Surface prospecting is also planned for the large
49,000 hectare property position to follow up on approximately 40
other known gold occurrences recorded by the previous owner of the
property, as well as anomalous base metal showings discovered late
last year. To this end, a new exploration camp with 82 beds is
expected to be constructed this May, approximately 10 kilometres
south of the mine site. About Agnico-Eagle Agnico-Eagle is a long
established Canadian gold producer with operations located in
Quebec and exploration and development activities in Canada,
Finland, Mexico and the United States. Agnico-Eagle's LaRonde Mine
is Canada's largest gold deposit in terms of reserves. The Company
has full exposure to higher gold prices consistent with its policy
of no forward gold sales. It has paid a cash dividend for 26
consecutive years. AGNICO-EAGLE MINES LIMITED SUMMARIZED QUARTERLY
DATA (thousands of United States dollars, except where noted, US
GAAP basis) (Unaudited) Three months ended ------------------ March
31, --------- 2008 2007 ---- ---- Income and cash flows Revenues
from mining operations............. $119,134 $100,730 Production
costs............................ 43,651 36,178 -----------
----------- Gross profit (exclusive of amortization shown
below).................. $75,483 $64,552
Amortization................................ 7,030 6,928
----------- ----------- Gross
profit................................ $68,453 $57,624 -----------
----------- ----------- ----------- Net income for the
period................... $28,908 $24,922 Net income per share
(basic)................ $0.20 $0.21 Net income per share
(diluted).............. $0.20 $0.20 Cash provided by operating
activities....... $53,824 $56,066 Cash used in investing
activities........... $(160,771) $(79,294) Cash provided by (used
in) financing activities................................. $6,484
$(10,663) Weighted average number of common shares outstanding -
basic (in thousands)..................... 143,372 121,159 Tonnes of
ore milled........................ 676,182 671,484 Head grades:
Gold (grams per tonne).................... 2.60 3.00 Silver (grams
per tonne).................. 64.62 84.40
Zinc...................................... 3.83% 3.71%
Copper.................................... 0.28% 0.39% Recovery
rates: Gold...................................... 90.04% 90.66%
Silver.................................... 85.97% 87.40%
Zinc...................................... 88.80% 85.30%
Copper.................................... 85.18% 84.80% Payable
production: Gold (ounces)............................. 50,892
58,588 Silver (ounces in thousands).............. 1,026 1,397 Zinc
(tonnes)............................. 19,467 17,944 Copper
(tonnes)........................... 1,453 1,990 Payable metal sold:
Gold (ounces)............................. 51,596 56,758 Silver
(ounces in thousands).............. 1,018 1,624 Zinc
(tonnes)............................. 18,710 17,767 Copper
(tonnes)........................... 1,421 1,978 Realized prices
(US$): Gold (per ounce).......................... $1,089 $669
Silver (per ounce)........................ $19.91 $13.82 Zinc (per
tonne).......................... $2,530 $2,798 Copper (per
tonne)........................ $10,559 $6,090 Total cash costs (per
ounce) (US$): Production costs............................ $858
$617 Less: Net byproduct revenues................ (1,237) (1,071)
Inventory adjustments..................... (14) 126 Accretion
expense and other............... (6) (4) ----------- -----------
Total cash costs (per ounce)(1)............................. $(399)
$(332) ----------- ----------- ----------- ----------- Minesite
costs per tonne milled (C$)(1)..... $65 $64 ----------- -----------
----------- ----------- (1) Total cash costs (per ounce) and
minesite costs per tonne milled are non-GAAP measures. For a
reconciliation of these measures to production costs in the
financial statements, see note 1 to these financial statements.
AGNICO-EAGLE MINES LIMITED CONSOLIDATED BALANCE SHEETS (thousands
of United States dollars, US GAAP basis) (Unaudited) As at As at
March 31, December 31, --------- ------------ 2008 2007 ---- ----
ASSETS Current Cash and cash equivalents................. $294,419
$396,019 Metals awaiting settlement................ 93,525 79,419
Inventories: Ore stockpiles........................... 4,702 5,647
Concentrates............................. 2,635 1,913
Supplies................................. 15,342 15,637 Other
current assets...................... 110,495 107,459 -----------
----------- Total current assets........................ 521,118
606,094 Other assets................................ 16,127 16,436
Future income and mining tax assets......... 24,181 5,905 Property,
plant and mine development........ 2,258,058 2,107,063 -----------
----------- $2,819,484 $2,735,498 ----------- -----------
----------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY
Current Accounts payable and accrued
liabilities.............................. $125,516 $108,227
Dividends payable......................... 438 26,280 Income taxes
payable...................... 4,648 - ----------- ----------- Total
current liabilities................... 130,602 134,507 -----------
----------- Reclamation provision and other
liabilities................................ 57,990 57,941
----------- ----------- Future income and mining tax
liabilities............................ 505,283 484,116 -----------
----------- Shareholders' equity Common shares Authorized -
unlimited Issued - 143,690,233 (December 31, 2007 -
142,403,379)......... 1,972,399 1,931,667 Stock
options............................... 29,708 23,573 Contributed
surplus......................... 15,166 15,166 Retained
earnings........................... 141,148 112,240 Accumulated
other comprehensive loss........ (32,812) (23,712) -----------
----------- Total shareholders' equity.................. 2,125,609
2,058,934 ----------- ----------- $2,819,484 $2,735,498 -----------
----------- ----------- ----------- AGNICO-EAGLE MINES LIMITED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(thousands of United States dollars except share and per share
amounts, US GAAP basis) (Unaudited) Three months ended
------------------ March 31, --------- 2008 2007 ---- ---- REVENUES
Revenues from mining operations............. $119,134 $100,730
Interest and sundry income.................. 4,115 5,274 Gain on
sale of available-for-sale
securities................................. 406 1,865 -----------
----------- 123,655 107,869 COSTS AND EXPENSES
Production.................................. 43,651 36,178 Loss on
derivative financial instruments.... - 6,128 Exploration and
corporate development....... 8,898 5,829
Amortization................................ 7,030 6,928 General
and administrative.................. 19,868 9,053 Provincial
capital tax...................... 869 1,062
Interest.................................... 1,054 751 Foreign
currency loss (gain)................ (8,889) (1,267) -----------
----------- Income before income, mining and federal capital
taxes...................... 51,174 43,207 Income and mining tax
expense............... 22,266 18,285 ----------- ----------- Net
income for the period................... $28,908 $24,922
----------- ----------- ----------- ----------- Net income per
share - basic................ $0.20 $0.21 ----------- -----------
----------- ----------- Net income per share -
diluted.............. $0.20 $0.20 ----------- -----------
----------- ----------- Weighted average number of shares
outstanding (in thousands)
Basic..................................... 143,372 121,159
Diluted................................... 144,375 125,649
AGNICO-EAGLE MINES LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of United States dollars, US GAAP basis) (Unaudited)
Three months ended ------------------ March 31, --------- 2008 2007
---- ---- Operating activities Net income for the
period................... $28,908 $24,922 Add (deduct) items not
affecting cash: Amortization.............................. 7,030
6,928 Future income and mining taxes............ 15,699 16,330
Unrealized loss on derivative contracts... - 5,723 Gain on sale of
available-for-sale securities............................... (406)
(1,865) Amortization of deferred costs and other.. 3,609 4,449
Changes in non-cash working capital balances Metals awaiting
settlement................ (14,106) 9,807 Income taxes
payable...................... 4,648 3,191 Other taxes
recoverable................... - 3,169
Inventories............................... 147 (2,591) Other
current assets...................... (8,994) (7,053) Accounts
payable and accrued liabilities.. 17,289 (6,944) -----------
----------- Cash provided by operating activities....... 53,824
56,066 ----------- ----------- Investing activities Additions to
property, plant and mine development...........................
(158,030) (62,974) Acquisition, investments and other..........
(2,741) (16,320) ----------- ----------- Cash used in investing
activities........... (160,771) (79,294) ----------- -----------
Financing activities Dividends paid..............................
(23,779) (13,406) Proceeds from common shares issued..........
30,263 2,743 ----------- ----------- Cash provided by (used in)
financing activities................................. 6,484
(10,663) ----------- ----------- Effect of exchange rate changes on
cash and cash equivalents.................. (1,137) 2,889
----------- ----------- Net increase in cash and cash equivalents
during the period.............. (101,600) (31,002) Cash and cash
equivalents, beginning of period........................ 396,019
458,617 ----------- ----------- Cash and cash equivalents, end of
period.... $294,419 $427,615 ----------- ----------- -----------
----------- Other operating cash flow information: Interest paid
during the period............. $683 $589 ----------- -----------
----------- ----------- Income, mining and capital taxes paid
during the period..................... - $25 -----------
----------- ----------- ----------- Note 1: Reconciliation of Total
Cash Costs Per Ounce and Minesite Costs
-----------------------------------------------------------------------
Per Tonne --------- (thousands of dollars, except where noted)
------------------------------------------ Three months Three
months ------------ ------------ ended March 31, ended March 31,
--------------- --------------- 2008 2007 ---- ---- Production
costs per Consolidated Statements of Income $43,651 $36,178
Adjustments: Byproduct revenues (62,943) (62,744) Inventory
adjustment(i) (730) 7,400 Non-cash reclamation provision (306)
(263) --------------- --------------- Cash operating costs
$(20,328) $(19,429) --------------- --------------- Gold production
(ounces) 50,892 58,588 --------------- --------------- Total cash
costs (per ounce)(ii) $(399) $(332) --------------- ---------------
(thousands of dollars, except where noted)
------------------------------------------ Three months Three
months ------------ ------------ ended March 31, ended March 31,
--------------- --------------- 2008 2007 ---- ---- Production
costs per Consolidated Statements of Income $43,651 $36,178
Adjustments: Inventory adjustments(iii) 999 1,001 Non-cash
reclamation provision (306) (263) --------------- ---------------
Minesite operating costs (US$) 44,344 $36,916 ---------------
--------------- Minesite operating costs (C$) 43,995 $42,682
--------------- --------------- Tonnes of ore milled (000's tonnes)
676 672 --------------- --------------- Minesite costs per tonne
(C$)(iv) $65 $64 --------------- --------------- ----------------
Notes: (i) Under the Company's revenue recognition policy, revenue
is recognized on concentrates when legal title passes. Since total
cash costs are calculated on a production basis, this inventory
adjustment reflects the sales margin on the portion of concentrate
production for which revenue has not been recognized in the period.
(ii) Total cash costs is not a recognized measure under US GAAP and
this data may not be comparable to data presented by other gold
producers. The Company believes that this generally accepted
industry measure is a realistic indication of operating performance
and is useful in allowing year over year comparisons. As
illustrated in the table above, this measure is calculated by
adjusting Production Costs as shown in the Consolidated Statements
of Income and Comprehensive Income for net byproduct revenues,
royalties, inventory adjustments and asset retirement provisions.
This measure is intended to provide investors with information
about the cash generating capabilities of the Company's mining
operations. Management uses this measure to monitor the performance
of the Company's mining operations. Since market prices for gold
are quoted on a per ounce basis, using this per ounce measure
allows management to assess the mine's cash generating capabilities
at various gold prices. Management is aware that this per ounce
measure of performance can be impacted by fluctuations in byproduct
metal prices and exchange rates. Management compensates for the
limitation inherent with this measure by using it in conjunction
with the minesite costs per tonne measure (discussed below) as well
as other data prepared in accordance with US GAAP. Management also
performs sensitivity analyses in order to quantify the effects of
fluctuating metal prices and exchange rates. (iii) This inventory
adjustment reflects production costs associated with unsold
concentrates. (iv) Minesite costs per tonne is not a recognized
measure under US GAAP and this data may not be comparable to data
presented by other gold producers. As illustrated in the table
above, this measure is calculated by adjusting Production Costs as
shown in the Consolidated Statements of Income and Comprehensive
Income for inventory and hedging adjustments and asset retirement
provisions and then dividing by tonnes processed through the mill.
Since total cash costs data can be affected by fluctuations in
byproduct metal prices and exchange rates, management believes
minesite costs per tonne provides additional information regarding
the performance of mining operations and allows management to
monitor operating costs on a more consistent basis as the per tonne
measure eliminates the cost variability associated with varying
production levels. Management also uses this measure to determine
the economic viability of mining blocks. As each mining block is
evaluated based on the net realizable value of each tonne mined, in
order to be economically viable the estimated revenue on a per
tonne basis must be in excess of the minesite costs per tonne.
Management is aware that this per tonne measure is impacted by
fluctuations in production levels and thus uses this evaluation
tool in conjunction with production costs prepared in accordance
with US GAAP. This measure supplements production cost information
prepared in accordance with US GAAP and allows investors to
distinguish between changes in production costs resulting from
changes in production versus changes in operating performance.
Detailed Mineral Reserve and Resource Data - December 31, 2007
-------------------------------------------------------------------------
Au Category and Zone Au Ag Cu Zn (000's Tonnes (g/t) (g/t) (%) (%)
oz.) (000's)
-------------------------------------------------------------------------
Proven Mineral Reserve
-------------------------------------------------------------------------
Goldex 2.23 18 250
-------------------------------------------------------------------------
Lapa 10.65 1 2.8
-------------------------------------------------------------------------
LaRonde 2.77 73.80 0.33 3.81 416 4,672
-------------------------------------------------------------------------
Subtotal Proven Mineral Reserve 2.75 435 4,924
-------------------------------------------------------------------------
Probable Mineral Reserve
-------------------------------------------------------------------------
Goldex 2.20 1,616 22,849
-------------------------------------------------------------------------
Kittila 5.12 2,996 18,205
-------------------------------------------------------------------------
Lapa 8.86 1,070 3,756
-------------------------------------------------------------------------
LaRonde 4.67 34.61 0.30 1.67 4,542 30,225
-------------------------------------------------------------------------
Meadowbank 3.67 3,453 29,261
-------------------------------------------------------------------------
Pinos Altos 3.21 92.21 2,547 24,657
-------------------------------------------------------------------------
Subtotal Probable Mineral Reserve 3.91 16,224 128,952
-------------------------------------------------------------------------
Total Proven and Probable Mineral Reserves 3.87 16,659 133,877
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Category and Zone Au Ag Cu Zn Tonnes (g/t) (g/t) (%) (%) (000's)
-------------------------------------------------------------------------
Bousquet 5.63 1,704
-------------------------------------------------------------------------
Ellison 5.68 415
-------------------------------------------------------------------------
Goldex 2.75 304
-------------------------------------------------------------------------
Kittila 3.03 5,416
-------------------------------------------------------------------------
Lapa 4.48 865
-------------------------------------------------------------------------
LaRonde 2.14 25.33 0.14 1.70 5,643
-------------------------------------------------------------------------
Meadowbank 2.30 14,582
-------------------------------------------------------------------------
Pinos Altos 1.36 49.88 6,182
-------------------------------------------------------------------------
Total Indicated Resource 2.48 35,111
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Category and Zone Au Ag Cu Zn Tonnes (g/t) (g/t) (%) (%) (000's)
-------------------------------------------------------------------------
Bousquet 7.45 1,667
-------------------------------------------------------------------------
Ellison 5.81 786
-------------------------------------------------------------------------
Goldex 2.35 11,889
-------------------------------------------------------------------------
Kittila 3.39 10,832
-------------------------------------------------------------------------
Lapa 8.96 759
-------------------------------------------------------------------------
LaRonde 6.26 22.65 0.47 1.07 4,723
-------------------------------------------------------------------------
Meadowbank 3.49 3,434
-------------------------------------------------------------------------
Pinos Altos 1.44 24.08 12,237
-------------------------------------------------------------------------
Total Inferred Resource 3.19 46,326
-------------------------------------------------------------------------
Tonnage amounts and contained metal amounts presented in the tables
in this news release have been rounded to the nearest thousand.
Reserves are not a sub-set of resources. Forward-Looking Statements
The information in this press release has been prepared as at May
8, 2008. Certain statements contained in this press release
constitute "forward-looking statements" within the meaning of the
United States Private Securities Litigation Reform Act of 1995 and
forward looking information under the provisions of Canadian
provincial securities laws. When used in this document, words such
as "anticipate", "expect", "estimate," "forecast," "planned",
"will", "likely" and similar expressions are intended to identify
forward-looking statements or information. Such statements include
without limitation: the Company's estimates of production,
including estimated ore grades, metal production, life of mine
horizons, forecast total cash costs and minesite costs, actual
production estimates and projected exploration and capital
expenditures, including costs and other estimates upon which such
projections are based; the Company's goal to increase its mineral
reserves and resources; the Company's cash position and other
statements and information regarding anticipated trends with
respect to the Company's operations and exploration. Such
statements reflect the Company's views as at the date of this press
release and are subject to certain risks, uncertainties and
assumptions. Forward-looking statements are necessarily based upon
a number of factors and assumptions that, while considered
reasonable by Agnico-Eagle as of the date of such statements, are
inherently subject to significant business, economic and
competitive uncertainties and contingencies. The factors and
assumptions of Agnico-Eagle contained in this news release, which
may prove to be incorrect, include, but are not limited to, the
assumptions set forth herein: that there are no significant
disruptions affecting operations, whether due to labour
disruptions, supply disruptions, damage to equipment, natural
occurrences, political changes, title issues or otherwise; that
permitting, development and expansion at each of Agnico-Eagle's
development projects proceeds on a basis consistent with current
expectations, and that Agnico-Eagle does not change its development
plans relating to such projects; that the exchange rate between the
Canadian dollar, European Union Euro, Mexican peso and the United
States dollar will be approximately consistent with current levels
or as set out in this press release or the Company's Form 20-F
referred to below; prices for gold, silver, zinc and copper will be
consistent with Agnico-Eagle's expectations; that prices for key
mining and construction supplies, including labour costs, remain
consistent with Agnico-Eagle's current expectations; that
production meets expectations; that Agnico-Eagle's current
estimates of mineral reserves, mineral resources, mineral grades
and mineral recovery are accurate; that there are no material
delays in the timing for completion of ongoing development
projects; and that there are no material variations in the current
tax and regulatory environment. Many factors, known and unknown,
could cause the actual results to be materially different from
those expressed or implied by such forward looking statements. Such
risks include, but are not limited to: the volatility of prices of
gold and other metals; uncertainty of mineral reserves, mineral
resources, mineral grades and mineral recovery estimates;
uncertainty of future production, capital expenditures, and other
costs; currency fluctuations; financing of additional capital
requirements; cost of exploration and development programs; mining
risks; risks associated with foreign operations; risks related to
title issues at the Pinos Altos project; governmental and
environmental regulation; the volatility of the Company's stock
price; and risks associated with the Company's byproduct metal
derivative strategies. For a more detailed discussion of such risks
and other factors, see the Company's Annual Information Form and
Annual Report on Form 20-F for the year ended December 31, 2007, as
well as the Company's other filings with the Canadian Securities
Administrators and the U.S. Securities and Exchange Commission (the
"SEC"). The Company does not intend, and does not assume any
obligation, to update these forward-looking statements and
information, except as required by law. Accordingly, readers are
advised not to place undue reliance on forward-looking statements.
Certain of the foregoing statements, primarily related to projects,
are based on preliminary views of the Company with respect to,
among other things, grade, tonnage, processing, mining methods,
capital costs, total cash costs, minesite costs, and location of
surface infrastructure and actual results and final decisions may
be materially different from those current anticipated. Notes To
Investors Regarding The Use Of Resources Cautionary Note To
Investors Concerning Estimates Of Measured And Indicated Resources.
This press release may use the terms "measured resources" and
"indicated resources". We advise investors that while those terms
are recognized and required by Canadian regulations, the SEC does
not recognize them. Investors are cautioned not to assume that any
part or all of mineral deposits in these categories will ever be
converted into reserves. Cautionary Note To Investors Concerning
Estimates Of Inferred Resources. This press release may also use
the term "inferred resources". We advise investors that while this
term is recognized and required by Canadian regulations, the SEC
does not recognize it. "Inferred resources" have a great amount of
uncertainty as to their existence, and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all
or any part of an inferred mineral resource will ever be upgraded
to a higher category. Under Canadian rules, estimates of inferred
mineral resources may not form the basis of feasibility or
pre-feasibility studies, except in rare cases. Investors are
cautioned not to assume that part or all of an inferred resource
exists, or is economically or legally mineable. Scientific And
Technical Data Agnico-Eagle Mines Limited is reporting mineral
resource and reserve estimates in accordance with the CIM
guidelines for the estimation, classification and reporting of
resources and reserves. Cautionary Note To U.S. Investors - The SEC
permits U.S. mining companies, in their filings with the SEC, to
disclose only those mineral deposits that a company can
economically and legally extract or produce. We use certain terms
in this press release, such as "measured", "indicated", and
"inferred", and "resources" that the SEC guidelines strictly
prohibit U.S. registered companies from including in their filings
with the SEC. U.S. Investors are urged to consider closely the
disclosure in our Form 20-F, which may be obtained from us, or from
the SEC's website at: http://sec.gov/edgar.shtml. A "final" or
"bankable" feasibility study is required to meet the requirements
to designate reserves under Industry Guide 7. Estimates were
calculated using historic three-year average metals prices and
foreign exchange rates in accordance with the SEC Industry Guide 7.
Industry Guide 7 requires the use of prices that reflect current
economic conditions at the time of reserve determination which
Staff of the SEC has interpreted to mean historic three-year
average prices. The assumptions used for the mineral reserves and
resources estimate reported by the Company on February 15, 2008
were based on three-year average prices for the period ending
December 31, 2007 of $583 per ounce gold, $10.77 per ounce silver,
$1.19 per pound zinc, $2.65 per pound copper and C$/US$, US$/Euro,
and Mexican Peso/US$ exchange rates of 1.14, 1.29 and 10.91,
respectively. The Canadian Securities Administrators' National
Instrument 43-101 ("NI 43-101") requires mining companies to
disclose reserves and resources using the subcategories of "proven"
reserves, "probable" reserves, "measured" resources, "indicated"
resources and "inferred" resources. Mineral resources that are not
mineral reserves do not have demonstrated economic viability. A
mineral reserve is the economically mineable part of a measured or
indicated resource demonstrated by at least a preliminary
feasibility study. This study must include adequate information on
mining, processing, metallurgical, economic and other relevant
factors that demonstrate, at the time of reporting, that economic
extraction can be justified. A mineral reserve includes diluting
materials and allows for losses that may occur when the material is
mined. A proven mineral reserve is the economically mineable part
of a measured resource for which quantity, grade or quality,
densities, shape and physical characteristics are so well
established that they can be estimated with confidence sufficient
to allow the appropriate application of technical and economic
parameters, to support production planning and evaluation of the
economic viability of the deposit. A probable mineral reserve is
the economically mineable part of an indicated mineral resource for
which quantity, grade or quality, densities, shape and physical
characteristics can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and
economic parameters, to support mine planning and evaluation of the
economic viability of the deposit. A mineral resource is a
concentration or occurrence of natural, solid, inorganic or
fossilized organic material in or on the earth's crust in such form
and quantity and of such a grade or quality that it has reasonable
prospects for economic extraction. The location, quantity, grade,
geological characteristics and continuity of a mineral resource are
known, estimated or interpreted from specific geological evidence
and knowledge. A measured mineral resource is that part of a
mineral resource for which quantity, grade or quality, densities,
shape, physical characteristics, can be estimated with a level of
confidence sufficient to allow the appropriate application of
technical and economic parameters, to support mine planning and
evaluation of the economic viability of the deposit. The estimate
is based on detailed and reliable exploration, sampling and testing
information gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes that are
spaced closely enough to confirm both geological and grade
continuity. An indicated mineral resource is that part of a mineral
resource for which quantity, grade or quality, densities, shape and
physical characteristics can be estimated with a level of
confidence sufficient to allow the appropriate application of
technical and economic parameters, to support mine planning and
evaluation of the economic viability of the deposit. The estimate
is based on detailed and reliable exploration and testing
information gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes that are
spaced closely enough for geological and grade continuity to be
reasonable assumed. An inferred mineral resource is that part of a
mineral resource for which quantity and grade or quality can be
estimated on the basis of geological evidence and limited sampling
and reasonably assumed, but not verified, geological and grade
continuity. The estimate is based on limited information and
sampling gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes. Mineral
resources which are not mineral reserves do not have demonstrated
economic viability. Investors are cautioned not to assume that part
or all of an inferred resource exists, or is economically or
legally mineable. A feasibility study is a comprehensive study of a
mineral deposit in which all geological, engineering, legal,
operating, economic, social, environmental and other relevant
factors are considered in sufficient detail that it could
reasonably serve as the basis for a final decision by a financial
institution to finance the development of the deposit for mineral
production. The mineral reserves presented in this disclosure are
not a subset of mineral resources. A Qualified Person, Dyane
Duquette P.Geo., Assistant Superintendent of Technical Services for
the Goldex project, was responsible for the mineral reserve and
mineral resource estimate at the Goldex project. Additional
information regarding the Goldex mineral resource and mineral
reserve estimate required by Canadian securities laws is set out in
the Company's Technical Report for the Goldex Project that was
filed on SEDAR on October 27, 2005 and in the Company's press
release dated February 15, 2008. The Kittila mine project mineral
resource and mineral reserve estimate was prepared by Jyrki
Korteniemi, the Superintendent of Geology for the Kittila Project
under the supervision of a Qualified Person, Marc Legault P.Eng.,
the Company's Vice-President, Project Development. Additional
information regarding the Kittila mineral resource and mineral
reserve required by Canadian securities laws is set out in the
Company's Technical Report for the Kittila Project that was filed
on SEDAR on March 14, 2006 and in the Company's press release dated
February 15, 2008. The Qualified Person responsible for the Lapa
mineral reserve and mineral resource estimate is Normand Bedard
P.Geo., the Superintendent of Geology for the Lapa mine project.
Additional information regarding the Lapa mineral resource and
mineral reserve required by Canadian securities laws is set out in
the Company's Technical Report for the Lapa Project that was filed
on SEDAR on June 8, 2006 and in the Company's press release dated
February 15, 2008. The Qualified Person responsible for the LaRonde
mineral reserve and resource estimate is Francois Blanchet Ing.,
Superintendent of Geology for the LaRonde Division. The effective
date of the estimate is December 31, 2007. Additional information
regarding the LaRonde mineral resource and mineral reserve required
by Canadian securities laws is set out in the Company's Technical
Report for the LaRonde Project that was filed on SEDAR on March 23,
2005 and in the Company's press release dated February 15, 2008.
The Qualified Person responsible for the Meadowbank mineral
resource estimate is Daniel Doucet Ing., Principal Engineer Geology
for the Company's Technical Services Group, Abitibi Regional
Office. Additional information regarding the Meadowbank mineral
resource and mineral reserve required by Canadian securities laws
is set out in the Company's Technical Report for the Meadowbank
Project that was filed by Cumberland Resources Ltd. on SEDAR on
March 31, 2005 and in the Company's press release dated February
15, 2008. The Qualified Person responsible for the Pinos Altos
mineral resource and reserve estimate is Daniel Doucet, Ing.,
Principal Engineer Geology for the Company's Technical Services
Group, Abitibi Regional Office. Additional information regarding
the Pinos Altos mineral resource and mineral reserve required by
Canadian securities laws is set out in the Company's Technical
Report for the Pinos Altos Project that was filed on SEDAR on
September 24, 2007 and in the Company's press release dated
February 15, 2008. The contents of this press release have been
prepared under the supervision of, and reviewed by, Marc Legault,
the Company's Vice President, Project Development, a "Qualified
Person" for the purposes of NI 43-101. Note Regarding Certain
Measures Of Performance This press release presents measures
including "total cash costs per ounce" and "minesite cost per
tonne" that are not recognized measures under US GAAP. This data
may not be comparable to data presented by other gold producers.
The Company believes that these generally accepted industry
measures are realistic indicators of operating performance and
useful for year over year comparisons. However, both of these
non-GAAP measures should be considered together with other data
prepared in accordance with US GAAP, and these measures, taken by
themselves, are not necessarily indicative of operating costs or
cash flow measures prepared in accordance with US GAAP. The Company
provides a reconciliation of realized total cash costs per ounce
and minesite costs per tonne to the most comparable US GAAP
measures in its annual and interim filings with securities
regulators in Canada and the United States. A reconciliation of the
Company's total cash cost per ounce and minesite cost per tonne to
the most comparable financial measures calculated and presented in
accordance with US GAAP for the Company's historical results of
operations is set out in Note 1 to the financial statements
included herein. (1) Total cash costs per ounce is a non-GAAP
measure. For reconciliation of total cash costs per ounce to
production costs, as reported in the financial statements, see Note
1 to the financial statements at the end of this news release. (2)
Payable gold production means the quantity of a mineral produced
during a period contained in products that are sold by the Company,
whether such products are sold during the period or held as
inventory at the end of the period. (3) Minesite costs per tonne is
a non-GAAP measure. For reconciliation of this measure to
production costs, as reported in the financial statements, see Note
1 to the financial statements at the end of this news release.
DATASOURCE: Agnico-Eagle Mines Limited CONTACT: David Smith, VP,
Investor Relations, (416) 947-1212
Copyright